A negotiable instrument is a financial document that guarantees the payment of a specific amount of money to the holder upon demand. This type of instrument is commonly represented by checks, promissory notes, and bills of exchange. The key feature of a negotiable instrument is that it can be transferred from one party to another, allowing for the easy exchange of funds. The holder of the instrument is entitled to receive payment as long as the instrument is valid and the conditions specified are met. This provides security and convenience in financial transactions, making it a fundamental concept in finance and banking.